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Chicago, IL – July 16, 2025 – Stocks in this week’s article are The Walt Disney Co. DIS, TE Connectivity plc TEL, Fortinet, Inc. FTNT, Banco Bilbao Vizcaya Argentaria, S.A. BBVA and Colgate-Palmolive Co. CL.
The broader equity markets have witnessed a steady uptrend over the past couple of days as investors shrugged off stringent tariff threats from President Trump on more countries. After announcing a slew of proposed tariffs on imported goods from 14 countries, including major trading partners and allies, Japan and South Korea, Trump threatened to impose additional levies on more countries in the coming days. With doors being kept wide open for negotiations, investors widely believe that a mutually beneficial solution will be reached to avoid any bloodbath as markets look ahead to a busy earnings season.
With a seemingly fruitful discussion between top U.S.-China diplomats to iron out the differences related to trade tariffs and a likely meeting between U.S. officials and Iran for a long-term peace agreement, markets appear to be on cruise control. Investors now await further clarity on the interest rate cuts with inflation data slated for release later this week.
As investors employ a wait-and-see approach in a classic example of "backing and filling" in the market, they can benefit from "cash cow" stocks that garner higher returns. However, identifying cash-rich stocks alone does not make for a solid investment proposition unless it is backed by attractive efficiency ratios, such as return on equity (ROE). A high ROE ensures that the company is reinvesting cash at a high rate of return. The Walt Disney Co., TE Connectivity plc, Fortinet, Inc., Banco Bilbao Vizcaya Argentaria, S.A. and Colgate-Palmolive Co. are some of the stocks with high ROE to profit from.
ROE = Net Income/Shareholders' Equity
ROE helps investors distinguish profit-generating companies from profit burners and is useful in determining the financial health of a company. In other words, this financial metric enables investors to identify companies that diligently deploy cash for higher returns.
Moreover, ROE is often used to compare the profitability of a company with other firms in the industry — the higher, the better. It measures how well a company is multiplying its profits without investing new equity capital and portrays management's efficiency in rewarding shareholders with attractive risk-adjusted returns.
Here are five of the 12 stocks that qualified the screening:
Walt Disney: Burbank, CA-based Walt Disney has assets that span movies, television shows and theme parks. This leading diversified international family entertainment and media enterprise operates through three business segments — Entertainment, Sports and Experiences.
The company has a long-term earnings growth expectation of 11.8% and delivered a trailing four-quarter earnings surprise of 16.4%, on average. It has a VGM Score of A. Walt Disney carries a Zacks Rank #2. You can see the complete list of today's Zacks #1 Rank stocks here.
TE Connectivity: Based in Galway, Ireland, TE Connectivity is a global technology company that designs and manufactures connectivity and sensor solutions for a wide range of industries, including automotive, aerospace, defense, energy and medical. With operations in more than 130 countries, TE Connectivity focuses on emerging technologies such as 5G, electric vehicles, industrial automation and smart cities to position itself at the forefront of connectivity advancements.
TE Connectivity carries a Zacks Rank #2. The company has a long-term earnings growth expectation of 9.8% and delivered a trailing four-quarter earnings surprise of 3.3%, on average. It has a VGM Score of B.
Fortinet: Headquartered in Sunnyvale, CA, Fortinet is a provider of network security appliances and Unified Threat Management network security solutions to enterprises, service providers and government entities worldwide. Its solutions are designed to integrate multiple levels of security protection, including firewall, virtual private networking, antivirus, intrusion prevention, web filtering, anti-spam and wide area network acceleration.
The company has a long-term earnings growth expectation of 13.4% and delivered a trailing four-quarter earnings surprise of 23.8%, on average. Fortinet carries a Zacks Rank #2.
Banco Bilbao: Headquartered in Bilbao, Spain, Banco Bilbao provides retail banking, wholesale banking and asset management services primarily in Spain, Mexico, Turkey, the Rest of Europe, South America, the United States and Asia.
The company has a long-term earnings growth expectation of 5.5% and delivered a trailing four-quarter earnings surprise of 6.3%, on average. Banco Bilbao sports a Zacks Rank #1.
Colgate-Palmolive: New York City-based Colgate-Palmolive is a global leader in the oral care hygiene market. It produces and distributes household, healthcare and personal care products. The company sells its products in more than 200 countries around the world.
Colgate-Palmolive has a long-term earnings growth expectation of 5.2% and delivered a trailing four-quarter earnings surprise of 4%, on average. It has a VGM Score of B. Colgate-Palmolive carries a Zacks Rank #2.
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For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2582681/5-high-roe-stocks-to-buy-as-markets-soar-despite-tariff-threats
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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This article originally published on Zacks Investment Research (zacks.com).
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